Save
Tax agents selling Aussies short: ATO
The Australian work-related expenses gap leaves the corporate tax gap in its wake, and agent-prepared returns bear the brunt of the blame.
Tax agents selling Aussies short: ATO
The Australian work-related expenses gap leaves the corporate tax gap in its wake, and agent-prepared returns bear the brunt of the blame.
While Australia’s $2.5 billion corporate tax gap receives intense scrutiny, the tax gap from incorrectly claimed work-related expenses is estimated to be larger, the Australian Taxation Office (ATO) said on Thursday.
Expressing disappointment, ATO commissioner Chris Jordan added that it’s the tax returns prepared by agents that are more likely to be incorrect.
“While the amount of each adjustment may be small, the overall impact when extrapolated to the whole population is significant. As I have mentioned previously, the work-related expenses gap is estimated to be greater than the large corporate tax gap of $2.5 billion,” he told the Tax Institute’s 33rd National Convention in Cairns.
“Though this is not new news, what is concerning is the different results for self-preparers and those who use an agent.”
Mr Jordan said it appears complacency has replaced the “golden rules of deductions”. That is, money must have been spent, and not imbursed, in relation to work and the claimant must be able to prove their expenditure.
“These results are really disappointing. For years I’ve heard how tax agents were guardians of the system – these random inquiry results tell me this is not the case for some agents. They are not fulfilling their duty as a registered tax practitioner in line with the Tax Practitioners Code of Conduct.
“In reality, they are selling their clients short – they are not bringing their expertise, nor taking care beyond reliance or blind acceptance of information given by clients, or even, leading clients to deductions that are not allowable.”
He said tax agents may consider easy, but incorrect, deductions may be a “sugar hit” for customers but warned that it’s a net negative for customers in the long term.
Mr Jordan’s comments align with previous warnings that the ATO will be scrutinising undeclared income, unexplained wealth as well as incorrectly claimed work-related expenses.
Speaking in November, he said, “From the random audits and other compliance activities conducted for the individual market, we are concerned by the level of non-compliance we are seeing – particularly in relation to overclaiming of work-related expenses.
“We also see some agents neglecting to check that their client has actually spent the money on the required item and that it was directly related to earning their income; and some claiming for personal (not work-related) expenses through carelessness, miscalculations and mistakes.”
With this in mind, Mr Jordan emphasised in his Thursday keynote address that when his tenure expires in 2024, he wants to be able to say: “People know and feel that complying with their obligations is not so hard, but more importantly, worth it, for peace of mind and for the satisfaction of doing the right thing. And there are consequences for those who do the wrong thing – they get caught, and are held to account.”
Tax saving
Over 2m Aussies asked the TPB for help during the last year
As the economy recovers, Australia’s tax regulator says it’s planning to put unregistered practitioners under the microscope. ...Read more
Tax saving
Will you pay higher taxes due to bracket creep?
Bracket creep will see Australians paying more tax on average, unless further cuts are introduced in the future. ...Read more
Tax saving
10 ways to reduce your tax bill
With the tax return deadline only one month away, these tips could help minimise your tax bill. ...Read more
Tax saving
Sustainable tax conditions only way forward: OECD
The Australian economy had been on a 28-year winning streak of uninterrupted growth before the pandemic. However, despite a return to lockdowns, the OECD has predicted that winning ways can return sh...Read more
Tax saving
ATO issues warning over new gift card scam
The Australian Taxation Office (ATO) is warning victims of a new phone scam, where scammers are pretending to be the tax man and demanding payments for unpaid tax liabilities. ...Read more
Tax saving
EV uptake set to stall following tax changes
Special EV taxes introduced by state governments are creating a disincentive for Aussies to choose cleaner vehicles and slowing Australia’s overall transition to net zero, new data has revealed. ...Read more
Tax saving
Rooftop solar avoids ‘sun tax’ but still faces caps
Power companies will soon be able to charge Australians with rooftop solar panels a tax for exporting electricity to the grid, albeit the regulators have walked back from the most controversial parts ...Read more
Tax saving
South Australians now eligible for COVID-19 Disaster Payment
South Australians under lockdown are set to be supported by the COVID-19 Disaster Payment, the state government has confirmed. ...Read more
How the post-lockdown period will influence property, what the soaring NFT market means, and defining financial wellness
Listen now
APRA’s mortgage crackdown, the power of DeFi and last-minute tax tips
Listen now
What to expect as the end of lockdown looms? Will the Stage 2 tax cuts boost your tax return? Where should investors be looking as the economy reopens?
Listen now
Could property prices inflate by another 20%? What’s happening in recent dividend announcements? Did your fund fail the YFYS test?
Listen now
Tax saving
Over 2m Aussies asked the TPB for help during the last year
As the economy recovers, Australia’s tax regulator says it’s planning to put unregistered practitioners under the microscope. ...Read more
Tax saving
Will you pay higher taxes due to bracket creep?
Bracket creep will see Australians paying more tax on average, unless further cuts are introduced in the future. ...Read more
Tax saving
10 ways to reduce your tax bill
With the tax return deadline only one month away, these tips could help minimise your tax bill. ...Read more
Tax saving
Sustainable tax conditions only way forward: OECD
The Australian economy had been on a 28-year winning streak of uninterrupted growth before the pandemic. However, despite a return to lockdowns, the OECD has predicted that winning ways can return sh...Read more
Tax saving
ATO issues warning over new gift card scam
The Australian Taxation Office (ATO) is warning victims of a new phone scam, where scammers are pretending to be the tax man and demanding payments for unpaid tax liabilities. ...Read more
Tax saving
EV uptake set to stall following tax changes
Special EV taxes introduced by state governments are creating a disincentive for Aussies to choose cleaner vehicles and slowing Australia’s overall transition to net zero, new data has revealed. ...Read more
Tax saving
Rooftop solar avoids ‘sun tax’ but still faces caps
Power companies will soon be able to charge Australians with rooftop solar panels a tax for exporting electricity to the grid, albeit the regulators have walked back from the most controversial parts ...Read more
Tax saving
South Australians now eligible for COVID-19 Disaster Payment
South Australians under lockdown are set to be supported by the COVID-19 Disaster Payment, the state government has confirmed. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
